If a Bond Is Selling at a Discount,which of the Following

question 58

Multiple Choice

If a bond is selling at a discount,which of the following statements is correct?

• A) The current yield must be greater than the coupon rate.
• B) The coupon rate must be greater than the yield to maturity.
• C) The bond must have a low bond rating.
• D) All of the statements are correct.

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Definitions:

Bundle Pricing

A pricing strategy in which several products or services are packaged together and sold at a single price, often lower than the total cost of purchasing each item separately.

Skimming Strategy

A pricing strategy where a company sets relatively high prices at the launch of a new product to maximize profits from customers willing to pay a premium.

Bundle Packaging

The practice of selling multiple products or services together as a single package deal.

Demand-Oriented

A pricing strategy where price is set based on consumer demand, with higher prices when demand exceeds supply and lower prices when demand is low.